Heinz to be acquired by Berkshire Hathaway and 3G Capital

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HJ Heinz Company is to be acquired by an investment consortium comprised of Berkshire Hathaway and 3G Capital.

Heinz shareholders will receive USD72.50 in cash for each share of common stock they own, in a transaction valued at USD28bn, including the assumption of Heinz’s outstanding debt.

The per share price represents a 20 per cent premium to Heinz’s closing share price of USD60.48 on 13 February, a 19 per cent premium to Heinz’s all-time high share price, a 23 per cent premium to the 90-day average Heinz share price and a 30 per cent premium to the one-year average share price.

“The Heinz brand is one of the most respected brands in the global food industry and this historic transaction provides tremendous value to Heinz shareholders,” says Heinz chairman, president and chief executive William R. Johnson. “We look forward to partnering with Berkshire Hathaway and 3G Capital, both greatly respected investors, in what will be an exciting new chapter in the history of Heinz. With Heinz stock recently at an all-time high and 30 consecutive quarters of organic topline growth, Heinz is being acquired from a position of strength. As a private enterprise, Heinz will have an opportunity to drive further growth and advance our commitment to providing consumers across the globe with great tasting, nutritious and wholesome products.”

Warren Buffett, chairman and chief executive of Berkshire Hathaway, says: “Heinz has strong, sustainable growth potential based on high quality standards, continuous innovation, excellent management and great tasting products. Their global success is a testament to the power of investing behind strong brand equities and the strength of their management team and processes. We are very pleased to be a part of this partnership.”

Alex Behring, managing partner at 3G Capital, says: “We have great respect for the Heinz brands and the strong business that management and its employees operate around the world. We approached Heinz to explore how we might work together to expand the value of this storied brand. We fully recognise Heinz’s value and heritage and look forward to working together with Heinz’s employees, suppliers and customers as we invest in and support the company’s ongoing global growth efforts.”

Understanding the need to preserve Heinz’s values, heritage and community connections, Berkshire Hathaway and 3G Capital have pledged to maintain Pittsburgh as its global headquarters, and to fulfil and continue its philanthropic support of community initiatives and related investments.

The transaction will be financed through a combination of cash provided by Berkshire Hathaway and affiliates of 3G Capital, rollover of existing debt, as well as debt financing that has been committed by JP Morgan and Wells Fargo.

Berkshire Hathaway owns and invests in businesses across a variety of industries, including numerous iconic brands. 3G Capital is a global investment firm focused on long-term value creation, with a particular emphasis on building and expanding brands and businesses.

The transaction is subject to approval by Heinz shareholders, receipt of regulatory approvals and other customary closing conditions, and is expected to close in the third quarter of 2013.